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A Solution Model for the Problem of “Ineffective Enforcement”

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Abstract

Current literature has reached a consensus on the utility of a monitoring system to guarantee effective enforcement of the OECD Anti-bribery Convention in signatories and the underperformance of the current OECD monitoring system. However, no effective analysis has been offered of structural flaws in the current OECD monitoring system that have caused the monitoring problem. This study argues that the surreptitious nature of transnational bribery and the potential regulatory competition among signatories determine that the effectiveness of the OECD monitoring system is a function of the extent to which the structural characteristics of the OECD monitoring system makes national anti-bribery efforts monitorable to other signatories. OECD anti-bribery collaboration needs an innovative monitoring approach which allows high-level inflow of information on transnational bribery offenses and effective mutual monitoring among signatories on transnational bribery regulation. This chapter formulates a three-level solution model to address the monitoring problem in OECD anti-bribery collaboration: first, given that anti-corruption scholarship has suggested that the lack of information on transnational bribery is a key impediment to transnational bribery regulation, and has also proved that the private sector is appropriate information source, this model encourages private sector actors to report clues of transnational bribery so as to resolve the lack of first-hand information on transnational bribery. Second, given the weakness of private sector actors in collecting solid evidence, this monitoring program should incorporate the comparative advantage of private sectors’ action in finding first-hand evidence of transnational bribery and the comparative advantage of public sector offices in conducting in-depth investigations in the same model. Third, given the general concern that a national prosecutor of the home country of bribe-paying companies may shirk duty because of protectionism, prosecutors in the home country of victimized competitors should be authorized the privilege to monitor the investigation process.

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Notes

  1. 1.

    One individual may change its own strategy contingent on changes in strategies of others. This tendency of individuals to change their own strategies contingent on strategies of others is a kind of “policy interdependence” (Wang 1998).

  2. 2.

    “Race to the bottom” refers to a result of policy competition among members in a group. The term of policy competition is about decentralization and policy interdependence. It initially refers to the phenomenon that local authorities compete to attract residents by offering favorable policies, and thereafter widely applies to other areas (Tiebout 1956: 416). A basic idea is that policy competition among individuals (either among persons or jurisdictions) would cause “race-to-the-bottom,” which means, as Schram explains, a phenomenon that “states compete with each other as each tries to underbid the others in lowering taxes, spending, regulation … so as to make itself more attractive to outside financial interests or unattractive to unwanted outsiders” (Schram 2000: 91).

  3. 3.

    The agreement could be in its real sense, for example, the power of the WTO to sanction violators is based on concrete agreements among members—see WTO, “About WTO,” available at: http://www.wto.org/english/thewto_e/thewto_e.htm (last visited: 3 May 2013); or in a constructive sense, such as Rousseau’s theory of “Social Contract” (Rousseau ([1762] 1968)).

  4. 4.

    See OECD Press Release, “Country Monitoring of the OECD Anti-Bribery Convention,” available at: http://www.oecd.org/daf/anti-bribery/countrymonitoringoftheoecdanti-briberyconvention.htm (last visited: 28 July 2014).

  5. 5.

    For information on how Convention obligations have been incorporated into domestic legal frameworks of signatories see Phase 1 reports of all signatories, available at: http://www.oecd.org/daf/anti-bribery/countryreportsontheimplementationoftheoecdanti-briberyconvention.htm (last visited: 23 June 2014).

  6. 6.

    See OECD Press Release, “OECD Working Group on Bribery in International Business Transactions,” available at: http://www.oecd.org/daf/anti-bribery/oecdworkinggrouponbriberyininternationalbusinesstransactions.htm (last visited: 20 April 2014).

  7. 7.

    See OECD Press Release, “Country Monitoring of the OECD Anti-Bribery Convention,” available at: http://www.oecd.org/daf/anti-bribery/countrymonitoringoftheoecdanti-briberyconvention.htm (last visited: 28 July 2014).

  8. 8.

    See OECD Country Reports, available at: http://www.oecd.org/daf/anti-bribery/anti-briberyconvention/RevisedPhase3Schedule_ENdoc.pdf (last visited: 28 July 2014).

  9. 9.

    See OECD Country Reports, available at: http://www.oecd.org/daf/anti-bribery/countryreportsontheimplementationoftheoecdanti-briberyconvention.htm (last visited: 20 September 2014).

  10. 10.

    See Reuters, “China Says GSK-Linked Trail Being Handled According to Law,” available at: http://www.reuters.com/article/2014/07/08/us-china-gsk-idUSKBN0FD0S420140708; “Exclusive: U.S. Prosecutors Add China Bribe Allegations to GSK Probe,” available at: http://www.reuters.com/article/2013/09/06/us-gsk-bribery-doj-idUSBRE98511R20130906 (last visited: 28 July 2014); and BBC, “GlaxoSmithKline to Be Investigated by UK Fraud Body,” available at: http://www.bbc.com/news/business-27597312 (last visited: 28 July 2014).

  11. 11.

    See US Phase 1 Report, available at: http://www.oecd.org/daf/anti-bribery/anti-briberyconvention/2390377.pdf (last visited: 4 May 2014).

  12. 12.

    See US Phase 2 Report, available at: http://www.oecd.org/daf/anti-bribery/anti-briberyconvention/1962084.pdf (last visited: 4 May 2014).

  13. 13.

    See US Phase 3 Report, available at: http://www.oecd.org/daf/anti-bribery/anti-briberyconvention/UnitedStatesphase3reportEN.pdf (last visited: 4 May 2013).

  14. 14.

    See OECD Press Release, “Country Monitoring of the OECD Anti-Bribery Convention,” available at: http://www.oecd.org/daf/anti-bribery/countrymonitoringoftheoecdanti-briberyconvention.htm (last visited: 28 July 2014).

  15. 15.

    See, for the US, the Uniform Deceptive Trade Practices Act (1964 Act or 1966 Revision) and for Germany, Gesetz gegen den unlauteren Wettbewerb (UWG) (Unfair Competition Act).

  16. 16.

    For example, in February 2013, former Italian premier Silvio Berlusconi publicly criticized prosecutors for arresting an Italian company’s officer: “…these are not crimes. We’re talking about paying a commission to someone in that country. Why, because those are the rules in that country,” available at: http://www.bloomberg.com/news/2013-02-14/berlusconi-tells-italian-firms-to-keep-bribing-after-orsi-arrest.html (last visited: 31 July 2014).

  17. 17.

    Germany Phase 1 Report (1999: § 3.7), available at: http://www.oecd.org/dataoecd/14/1/2386529.pdf (last visited: 26 April 2014).

  18. 18.

    Williams Elec. Games, Inc. v. Garrity, 366 F.3d 569, 576 (7th Cir. 2004).

  19. 19.

    False Claims Act Amendments, Pub. L. 99-562, 100 Stat. 3153 (27 October 1986). The Act was amended and reinforced once again in 2009 (Fraud Enforcement and Recovery Act of 2009, Pub. L. No. 111-21, 123 Stat. 1617, 20 May 2009).

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  1. Peking University, Beijing, China

    Lianlian Liu

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Liu, L. (2019). A Solution Model for the Problem of “Ineffective Enforcement”. In: The Global Collaboration against Transnational Corruption. Palgrave Macmillan, Singapore. https://doi.org/10.1007/978-981-13-1138-3_4

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